2002 (3) TMI 388 - AT - Customs

Tribunal overturns confiscation order and penalties for ball bearings, requiring burden of proof on Customs.

ASSOCIATED BEARING CORPN. Versus COMMISSIONER OF CUSTOMS, NEW DELHI

ASSOCIATED BEARING CORPN. Versus COMMISSIONER OF CUSTOMS, NEW DELHI - 2002 (143) E.L.T. 332 (Tri. - Del.) Issues:1. Confiscation of ball bearings recovered from the premises of M/s. Associated Bearings Corporation.2. Imposition of personal penalties on partners of M/s. Associated Bearing Corporation.Analysis:1. The appellants challenged the adjudication order passed by the Commissioner of Customs regarding the confiscation of 1173 pieces of ball bearings found at M/s. Associated Bearings Corporation. The appellants disputed the claim that the ball bearings were smuggled into India, arguing that there was no evidence to support this assertion. They contended that since ball bearings were not listed as notified goods under Section 123 of the Customs Act, the burden of proof lay with the Revenue to demonstrate that the goods were smuggled. The appellants presented invoices from various firms to prove the legitimate purchase of the ball bearings. They cited previous tribunal decisions to support their argument, emphasizing that the onus was on the Revenue in cases where seized goods were not listed under Section 123 of the Customs Act.2. The Department's representative reiterated the lower authority's findings and referred to a specific tribunal decision in support of their position. However, the Tribunal found that the case cited by the Department was not directly applicable to the present situation. In that case, the individual in possession of the ball bearings could not provide satisfactory explanations or documentation regarding the source of the goods. In contrast, the appellants in this case were able to produce bills and invoices from various firms to establish the legal procurement of the ball bearings. Relying on a series of tribunal decisions, the Tribunal concluded that the mere foreign origin of ball bearings did not automatically indicate that they were smuggled goods. Given that ball bearings were not listed under Section 123 of the Customs Act, the burden of proving that they were smuggled rested with the Customs department. Consequently, the Tribunal set aside the order for confiscation of the ball bearings and the personal penalties imposed on the partners of M/s. Associated Bearing Corporation, ruling in favor of the appellants based on the established legal precedents and the lack of sufficient evidence to support the confiscation and penalties.